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February 8, 2024

When and why should you work with a recruiting agency?

John Kim
Co-founder @ Paraform

Hiring is time consuming, especially sourcing. Sourcing is not the type of work that provides you constant dopamine hits. You’ll get a lot more No’s than Yes’s and much of it will feel like a wasted effort, leading to frustration and dead ends.

One of the most common questions we get is when and why should we work with a recruiting agency? In this article, we’ll go over the pros and cons of recruiting in-house vs working with recruiting agencies. Interesting note to start with: most companies do both!

Recruiting in-house

In-house recruiting has its benefits. By being directly part of a company, recruiters have more insight when it comes to the culture, managers, business performance etc. They also hold a wider range of responsibilities; not just sourcing but also coordinating interviews, writing JDs, setting up ATS, and other operational tasks.

Because this is a multi-faceted value add to any organization, there is clear ROI especially long term.

However, there are also drawbacks to hiring in-house. If you’re an early stage startup (Seed - Series A), you might be making ~10 hires a year and don’t have an ongoing need. It makes it harder to flex based on demand.

At growth stage (Series B+), you might have a head of talent and a core group of in-house recruiters, but for niche/hard-to-fill roles that come up, you might want to tap into existing networks or specialized expertise. It’s hard to hire someone in-house who covers all bases from day 1.

Working with external recruiters (recruiting agencies, independent recruiters)

Startups can also consider working with recruiting agencies. Main benefits point to speed at which an important role can be filled. Recruiting agencies specialize in sourcing, and typically reach your target talent pool very quickly.

Agencies also tend to specialize in a certain niche so they have a rolodex of strong candidates, allowing them to make important introductions early in the search.

What we also noticed while building Paraform, in most cases agency recruiters were pound-for-pound better than in-house recruiters at sourcing.

E.g. imagine a recruiter at Tesla reaching out to an engineer - did the engineer respond because of how good the outreach message was or because the recruiter had a Tesla logo on their LinkedIn or email signature? It’s most likely the former.

Agency recruiters have not as much to work with and are under more scrutiny if they don’t bring value immediately which motivates them to have a higher output - they want to close those roles, and fast. We see that for sourcing, on average that agency recruiters outperform their in-house counterparts at both quality and volume by more than 50%!

There are also cons to working with an agency. For one, typically these folks are held to a contract where they will only get paid when the role is filled which risks poor quality submissions, forcing hiring teams to fish through wrong matches.

You may also see a disconnect when it comes to employer branding and culture. Agencies are more detached from the day-to-day of an organization. While their goal is to of course sell a candidate on a company, they risk portraying the brand incorrectly.

Where does Paraform fit in here?

Paraform aims to offer the best of both worlds. On our marketplace, you can match and work with a team of vetted & specialized external recruiters while making sure your employer brand is well represented.

Since you’re working with multiple recruiters with minimal management overhead (using our software), you’re not putting all your eggs in one basket and tapping into networks that previously were unreachable

Intake calls
Intake calls

On Paraform, with a click of a button, you can easily schedule an intake call with top recruiters before they kickoff the search.

This is a great way for you to align on intangibles, answer questions that will help them do a better job, and even learn from expert feedback.

Ideal companies
Ideal companies

Recruiting advice
Recruiting advice

On Paraform, you can easily provide the necessary information for recruiters to do their best job. Your job description, interview & rejection notes, scorecards, messages to recruiters, etc. all help contribute to calibrating towards the ideal candidate profile.

Review outreach message
Review outreach message

You can review out reach messages from recruiters before they start sourcing to make sure you’re aligned on employer brand!

Verified track record
Verified track record

This is Marcus, one of the recruiters on our platform who recently made a placement for the Tech Lead role at Terradot! As the hiring manager, you can see a verified track record of the recruiter you’re working with so you can manage performance
for your search.

💨 Learn more in detail here:

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